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Outpatient Growth Must Keep Pace with Population

Jacqueline Fellows, April 22, 2013

The all-in-one service site also gives the system room for potential consolidation. If all goes as planned, an additional eight to 10 CCCs will be added to Memorial Hermann's roster over the next three to five years.

"The idea is that in key locations throughout the greater Houston area, we can start to put these [centers offering] the imaging, the ambulatory surgery, all the elements of ambulatory services. A lot of these 110 sites are in leased space. We think there will be an opportunity through population management where you have a greater ability to have a smaller network serve a larger population that we can—over time, as our leases are up in some of these locations—start to aggregate those sites to a more centrally driven site that has all the services in one location."

Memorial Hermann isn't abandoning its physician offices and other stand-alone sites entirely. Rather, Brace says the health system is redefining its targets to prepare for the paradigm shift in healthcare reimbursement.

"If you take a population approach, as opposed to just building facilities in tight little circles where you already have existing facilities, then that prepares us for moving into risk-based arrangements with payers or population health management arrangements as well," says Brace.

To measure how well it is keeping pace with population, Memorial Hermann will monitor its market share, which Brace says is approximately 30%. Any increase in population will hopefully mirror an uptick, explains Brace.

"It's trying to grow at the same market share with that growth that's happening," says Brace.

That market share increase is likely to be incremental—Jankowski says estimates show Houston's population growth is projected to be 1.8% annually through 2040. But when the population is 6 million, even a small increase means a large raw number. Brace says they'll also be looking at patient volume, patient experience, and health outcomes at the CCCs.

Memorial Hermann's outpatient growth strategy also includes growing its physician network of primary care physicians. Christopher Lloyd, CEO of MHMD–Memorial Hermann Physician Network, one of the largest independent physician organizations in Texas, says growth means repositioning primary care through patient-centered medical homes.

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